Tag Archives: George Leventhal

County Executive Candidates on the Liquor Monopoly

Question: The county’s liquor monopoly has come under heavy criticism–not least from Seventh State. If at all, how would you reform or change, or press the state legislature to change, the Department of Liquor Control?

Roger Berliner

At the county level, I have been the chief advocate for ending our unique – and counterproductive – liquor monopoly.  As someone who has fought monopolies most of my professional life, I know in my bones that monopolies are rarely, if ever, in the public interest.  Government monopolies are generally even less efficient.  And a government monopoly that tries to do a job that the private sector does in the rest of the country is almost always less efficient.  That is true in MoCo.  As a result, our residents vote with their feet.  Almost one-third of our purchases of liquor are made outside Montgomery County.  Our restaurants hate it.  Top flight restaurants have said that they would never come here. Bottom line: our monopoly needlessly perpetuates the reputation of our county being anti-business and anti-consumer and stunts our economy.

However, the state is a critical partner in this conversation.  It is state law that created our monopoly, and state law must be passed to change it.  The positive side of this dynamic is that the state would be the principal, direct beneficiary of increased liquor sales.  I would work with the Governor and our legislature to split the savings that the state would derive and hold the county harmless as it weans itself from this monopoly.  The dollars are not that significant given that our retail operations should continue to do well – assuming that they can compete!  And in the long run, our county will prosper more without the monopoly than with it.

Marc Elrich

Any discussion of the Department of Liquor Control (DLC) must acknowledge that the Montgomery County budget relies on over $30 million in liquor revenue per year.  That is no small amount of money, and it supports critical county services, including almost $11 million for bond payments.  Nobody who has proposed privatizing the county’s liquor supply has a workable plan to fill the budget hole privatization would create, likely because there is no way to do so that doesn’t create other problems for the state.

Privatization proposals thus should not be taken seriously; instead, we should continue to look for ways to make the DLC more efficient and effective than it has been in the past, and to increase sales so that we can increase the revenue that the DLC generates.

We’ve already changed the way the DLC is run by bringing in industry professionals, including the director and the warehouse manager, who have improved the operations of the liquor system and brought in a philosophy of continuous improvement.  I’ve also encouraged introducing lower markups for more expensive items, which they did, and I’ve supported and will continue to support efforts to help local breweries and wineries sell and distribute their goods.  Both the new director and I want to hear and consider other ideas for helping transition the DLC from something that the county has long taken for granted into a professionally run system.

In fact, if a private-sector business had a division that produced a substantial profit but was identified as having management problems and customer service issues that prevented it from being more profitable, its most likely course of action would be to change management, work to improve services, and strive for greater profits.  That is exactly what we have been doing with the DLC.

Bill Frick

I have been the state’s leader on fixing this abysmal broken system.  My “end the monopoly” effort, helped immensely by the Seventh State’s Adam Pagnucco, fell short in 2016 in large part because of vigorous opposition from the Council and County Executive.  We agreed to let the Executive lead a work group on the issue, but that work group served no real purpose other than to push the issue onto the desk of the next Executive.

This is a great opportunity.  The DLC has value, and I have proposed to ensure that the value stays with Montgomery County by selling off the DLC’s assets, such as its franchise rights to beer distribution, its stores and warehouse, to generate millions in capital dollars that can be spent on school construction.  Because the elimination of the DLC will generate millions in repatriated sales and excise tax dollars, I would work with my colleagues in the legislative leadership to help return some of those revenues to the County.  Finally, we all know that the work of alcohol distribution will not disappear with the end of the DLC, rather, those jobs will migrate to the private sector and will likely grow in the County as our consumers come home to buy their beer, wine and spirits here.  I will work with the private sector distributors and unions to find the best outcomes for current DLC employees as we get the County out of the liquor business.

George Leventhal

I am willing to entertain serious negotiations with parties who are willing to make a serious offer to purchase the right to distribute beer, wine and spirits in Montgomery County. In FY 2018, that enterprise generated more than $33 million in surplus revenue over expenses to the county’s general fund, of which $11 million was spent on debt service for approximately $100 million in Liquor Control Revenue Bonds, which were issued more than a decade ago to pay for transportation improvements, including the Montrose Parkway. I think we should commission an independent economic analysis of the present value of a guaranteed revenue stream of more than $30 million each year. My understanding is that it would come to hundreds of millions of dollars – more than enough to retire the bonds. I do not think the county should simply give away these valuable rights, which belong to the people of the county. However, serious offers from serious buyers should be considered. Simply giving the rights (and the associated revenues) away would require that the bonds be retired or refinanced through other means. If general obligation bonds were used to refinance the Liquor Control Revenue Bonds, it would reduce the county’s ability to construct new schools and other capital projects by $100 million.

In the absence of a serious offer to buy the rights to the entire enterprise, I continue to support the County Council’s 2015 proposal to privatize special order sales of beer and wine. Problems with delivery of special orders comprise the vast majority of complaints from restaurants, but the Montgomery County delegation to Annapolis declined to take up the County Council’s proposal in the 2016 session after County Executive Leggett asked for more time for study.

The Montgomery County delegation also declined to take up proposals for immediate privatization or for a voter referendum. Candidates for County Executive who have concerns about the Department of Liquor Control’s shortcomings should remember that liquor laws are made in Annapolis, not in Rockville. I would also support action by the state legislature to allow sales of beer and wine in grocery stores. Beer and wine stores will soon be able to sell spirits under legislation that passed in the 2017 session, which I supported.

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George Leventhal: Name One Program You Would Cut

Name one program in the county budget that is not working and can be cut.  Tell us how much in annual savings that would yield.

I will work diligently with the Office of Management and Budget, and with every department, to find savings and process improvements if I am elected to lead this government. I understand the mission of every county department. I have low tolerance for redundancy. I am prepared to prioritize, and to say no to additional spending where saying no is warranted. One place we could start is by looking at how the county provides health care to its employees.

Montgomery County will spend $245 million in FY2018 on employee health coverage. In 2011, I commissioned a Task Force on Employee Wellness and Agency Consolidation, which recommended adoption of an employee wellness program. It took the Leggett administration until 2015 to get the program fully up and running. Between 2017 and 2018, health claims dropped by $3 million, although it is not clear this is statistically significant, or directly caused by participation in employee wellness programs. I am confident that continued implementation of employee wellness efforts will lead to continued reduction in utilization of health benefits, and increased savings.

The task force also recommended consolidating procurement of employee health coverage between county government, the school system and Montgomery College. The school system and the college have declined to adopt this recommendation. School employee unions feared their members might lose their more favorable benefits. However, the county’s Office of Human Resources already administers health benefits among different bargaining units, and could easily administer health benefits for school system and college employees, resulting in substantial overhead savings, and savings from group purchasing. I will continue to advocate for unified administration of health benefits among all three agencies.

Additional overhead savings, and efficiencies from volume purchasing, could also be achieved by consolidating procurement of all goods and services for county government, MCPS and Montgomery College in a single office.

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George Leventhal on Jobs

Job growth has been stagnant in Montgomery County over the past few years. What would you do to encourage increased job growth?

We have seen good news on job growth recently. County Executive Leggett’s office reported in January that the county had added 7,163 jobs since the previous January and in May that resident employment had increased by 10,900 jobs (not all located in the county) since the previous May. High-profile business location decisions recently have included Marriott’s decision to keep its headquarters in the county, Discovery’s decision to keep 230 jobs in Silver Spring rather than relocate them to Virginia, and WTTG/Fox 5’s decision to relocate to Bethesda from Northwest Washington.

Montgomery County has a great story to tell, but we need to do a better job telling it. Our quality of life is high; we have great public schools; honest and effective government; excellent cultural and recreational opportunities; beautiful natural features; proximity to airports, shipping routes, interstate highways and public transportation; high family incomes; a low crime rate, and a low unemployment rate. I supported creating the new Montgomery County Economic Development Corporation and am glad to see it is investing more than ever before in marketing our county’s excellent attributes to grow our job base and retain existing employers.

We have one of the smartest, most diverse work forces in the United States. We should advertise ourselves as the International Gateway to the Nation’s Capital, to attract employers from around the world and entice the talent our employers need to compete in the global marketplace. While our workforce already possesses more graduate degrees than any other community, and a wider array of language skills than most, we must make language education a higher priority in our schools. Language immersion should be expanded, especially in languages critical for global trade and national security, like Mandarin, Spanish, French, German, Hindi/Urdu, Arabic, Russian, Farsi, and Portuguese.

To appeal to the millennial generation of workers, and the generations that will follow them, we must continue our placemaking efforts, to build great urban communities in locations well served by transit, including Bethesda, Silver Spring, Rockville, Wheaton, and Glenmont, and we must expand transit options to economic opportunity hubs like Gaithersburg, Germantown and White Oak.

We should increase vocational training in our schools. The courses available at Edison High School are insufficient. Not all students will, or need to, attend college. Many good-paying jobs in industrial, manufacturing, information technology and other sectors can be filled by high school graduates with additional technical and vocational training.

We need to continue focused efforts to streamline our planning, permitting and procurement processes to see where they can be made more efficient and business-friendly. We must also strengthen our efforts to keep Montgomery County tax dollars in our local economy, by strengthening programs like the Local Small Business Reserve (which I originated), and minority, female and disabled business purchasing preferences.

I support designating Enterprise Zones to attract investment to areas that are struggling, like Glenmont and Burtonsville. I have also supported tax credits for investors in life science, environmental technology and cybersecurity, and I am currently exploring a county add-on to federal Small Business Innovation Research (SBIR) awards. I will seek to reduce our county energy tax, which puts our high-tech and data-intensive businesses at a particular disadvantage.

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Raise the Minimum Wage? George Leventhal Answers

Seventh State is pleased to present George Leventhal’s response to our question on the minimum wage.

Do you favor an increase in the Montgomery County minimum wage and, if so, by how much and on what timeline? Would you have any exemptions and, if so, for whom?   

I support raising the minimum wage to $15 per hour by 2020, as our neighbor, the District of Columbia, has already done. I am amenable to a slower rate of increase for businesses with 25 or fewer employees and for non-profit organizations.

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In Their Own Words, Part IV: George Leventhal

We continue with our County Executive questionnaires with Councilmember George Leventhal (D-At Large).

What was your most important achievement in your current or past office? How do you think it demonstrates your leadership ability?

My most important achievement is that I have consistently been a champion for those who most need a government on their side. My leadership in public office has been to utilize innovative methods of helping and serving those who, but for the involvement of government, could not achieve a high quality of life on their own.

  • I established the Montgomery Cares program, a network of community clinics that this year will provide 70,000 visits to patients without health insurance. The program includes medical check-ups; sick visits; medications; lab tests; X-Rays; flu shots; access to specialty care; access to behavioral health care; oral health care; and more.
  • In 2015, because of my leadership, Montgomery County housed every identified homeless veteran in the county. We are one of three states and 51 communities that have achieved functional zero for veteran homelessness.
  • In 2017, I provided funding to ensure the county can house every chronically homeless individual by the end of 2018, through the “Inside Not Outside” campaign.
  • I have been the champion every year since 2003 for supplementing the wages paid to caretakers for people with developmental differences.
  • I passed the Design for Living legislation, which provides property tax credits for investments that make housing accessible for elderly and disabled residents.
  • I created the county’s Interagency Commission on Homelessness.

I have consistently championed funding for the Maternity Partnership Program, to ensure prenatal care for expectant mothers without health insurance, and Care for Kids, to ensure health insurance for all Montgomery County children.

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George Leventhal on Hogan’s Road Plan

I had the chance to speak with George Leventhal about Gov. Hogan’s road proposal. He explained that the proposal was a complete surprise to local officials because just days earlier Hogan’s Department of Transportation had presented their proposal to spend $100 million to improve mobility on I-270.

As for Hogan’s new proposal, created without any consultation with Montgomery officials, George said “It isn’t possible to be for it or against it because we don’t really know what it is.” In particular, he he emphasized the lack of any information on whether the proposal would include the American Legion Bridge.

The following is by Councilmember George Leventhal (D-At Large):

We need a lot more information about Governor Hogan’s announcement yesterday, but I am glad to see him paying attention to Montgomery County’s traffic congestion problems. I have been calling for expanded capacity on I-270 and the American Legion Bridge for a long time, and until yesterday, the governor had offered only a good, but insufficient, proposal for I-270, to improve technology and signalization, totaling $100 million. It will be interesting to learn how his new proposal is to be integrated with that earlier proposal.

The County Council has called for two additional reversible lanes on I-270, and it will be worth discussing with the state whether that would be sufficient, and obviate the need for four new lanes. Also, I would like to see a dedicated transitway as part of any plan for I-270 and the American Legion Bridge.

When it comes to I-495 east of the I-270 spur, I don’t understand how lanes could be added without significant adverse consequences to homes, businesses, watersheds, and Rock Creek, Sligo Creek and Northwest Branch Parks.

The governor’s attention to our transportation problems is welcome, but it would have been nice to see closer consultation with local officials before the announcement was made. Fortunately, it’s just a broad outline at this point and I hope that he and his team will now work with local government to figure out the details.

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First Time Ever: Elrich Reaches Financial Parity with Leventhal

 By Adam Pagnucco.

Many things have happened over the last four election cycles, but one thing has remained constant: George Leventhal has smoked Marc Elrich in fundraising.

Not anymore.

Elrich, who is running against Leventhal, Roger Berliner and Bill Frick to be the next County Executive, just filed his first application for public financing matching funds with the state.  So far, Elrich has more in-county contributors than Leventhal (693 to 590) and has raised more money from in-county individuals ($59,717 vs $46,128).  But Leventhal has received more public funds, leaving him with a slight lead in total fundraising.  Summary data for all qualifying publicly financed candidates appears below.

This is a dramatic turn of events from the past.  Leventhal and Elrich first ran against each other in 2002 as members of slates headed by County Executive Doug Duncan and Council Member Blair Ewing respectively.  Leventhal outraised Elrich by more than 5-1 that year and was backed by hundreds of thousands of dollars more in slate money from the real estate industry.  Over the next three cycles, Leventhal raised about twice as much as Elrich.

But public financing has eroded Leventhal’s edge.  That was predictable considering that both Leventhal and Elrich have had around 600 in-county individual contributors each in both the 2010 and 2014 cycles.  The ability of a candidate to raise money in the public financing system depends solely on the number of in-county contributors he or she has.  So if two candidates have similarly sized individual donor bases, they will raise similar amounts of money.

That fact is not lost on the Leventhal campaign, which sent out the fundraising email below shortly after seeing Elrich’s report.

Leventhal is right to be concerned about Elrich’s financial success.  Leventhal finished fourth and Elrich finished first in the last two at-large council elections despite the fact that Leventhal outraised Elrich 2-1.  What happens now when the two are at financial parity?

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Updated: Preliminary Fundraising Totals in Public Campaign Financing, September 2017

By Adam Pagnucco.

This morning, we posted preliminary fundraising totals for candidates in public financing.  But one of those reports was wrong because of a problem with the State Board of Elections’ processing software.  This post contains updated information.

Shortly after our original post, we received the following communication from Council At-Large candidate Hoan Dang’s campaign.

Hi Adam, this is Jonathon Rowland, campaign manager for Hoan Dang.  Thank you for the article this morning.  I just want to correct the amount stated.  When we filed with the Board of Elections, our report was duplicated because of a glitch in the system giving us double the amount of donations.  We have been in contact with the Board of Elections since Monday to resolve this issue.  The actual amount of donations is 316.

When your author called Rowland for more details, he said that the Dang campaign found the error first and asked the board to correct it.  Board staff acknowledged the mistake and said that they were working with their IT developer to fix it going forward.  No public funds were ever distributed before the Dang campaign caught the mistake.

Including information provided by Dang’s campaign today, here is the updated comparison of the five campaigns who have applied for public financing.

Dang is not the leader in public financing.  George Leventhal, who is running for Executive, is the overall leader in qualifying contributors and receipts.  (Executive candidates get higher match rates than council candidates.)  Among the council candidates, incumbent Hans Riemer leads in qualifying contributors and Bill Conway leads in matching funds.  This should not discount a strong performance by Dang, whose financial numbers are not terribly different from Riemer’s.

Going forward, we hope the state prevents the kinds of mistakes that affected Dang’s campaign.  In the initial glitchy filing, Dang supposedly requested $148,328 in public matching funds.  (Again, the IT glitch was not Dang’s fault.)  In the updated filing, Dang requested $74,144 in public matching funds.  That’s a $74,184 difference.  If Dang had not caught the mistake, could that difference have conceivably been paid out?  There’s no evidence available on that point.  But for the good of public confidence in the county’s public financing system, we hope such a mistake never happens.

On a different issue, we asked what happened to Council Member Marc Elrich’s filing for public matching funds in our original post.  Elrich said he had enough contributors to qualify back in June but has not filed yet.  When asked about it on Leventhal surrogate Saqib Ali’s Facebook page, Elrich said his delay in filing was related to a payment his campaign had made to the county party, which was subsequently ruled to not be in compliance with public financing requirements.  We reprint Elrich’s statement below.

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Preliminary Fundraising Totals in Public Campaign Financing, September 2017

By Adam Pagnucco.

Correction: The numbers for Hoan Dang in this post are inaccurate.  For updated numbers on Dang and a response by Marc Elrich, please visit our updated post.

One of the virtues of public campaign financing is the rapid release of financial reports for participating candidates.  That’s right, folks – for this group of candidates, there is no need to wait until January to see fundraising numbers.  That’s because when they qualify for public matching funds and request them from the state, their financial reports are released almost immediately.  This is terrific for all data junkies like your author as well as inquiring minds among the readers!

Below is a summary for the five candidates who have applied to receive matching funds from the state.  Bear in mind the following characteristics of the data.  First, the number of qualifying contributors means the number of contributors who live in Montgomery County.  Non-residents can contribute up to $150 each but the state will not authorize matching funds for them.  Second, the individual contribution amounts are the basis on which the state determines how much in public matching funds will be released.  Third, the date of cash balance is important because it varies depending on when the applications were sent in.  That is unlike the regular reporting dates on which financial positions are summarized at the same time for all candidates.  And fourth, for those candidates who have only filed once (which includes everyone except George Leventhal), the cash balances do not include public funds from the state.  To estimate the cash positions of those candidates, the cash balance should be added to the public matching funds they requested.

What do we make of this?

1.  Let’s start with the obvious: there are a lot of small checks out there!  While many contributors are probably donating to more than one of these five campaigns, it’s not a stretch to say that close to a thousand people will have contributed by some point in the near future.  It’s hard to make comparisons with the past without exquisitely detailed research to back it up (anyone want to pay us for that?) but our hunch is that this is a larger early donor pool than in prior cycles.

2.  The big story here is Council At-Large candidate Hoan Dang.  At-Large Council Members George Leventhal (who is running for Executive) and Hans Riemer (the only incumbent running for reelection) have a combined 22 years of representing the whole county.  But Dang had more in-county contributors than either one of them!  How does that happen?  Dang ran for Delegate in District 19 in 2010.  He was financially competitive, raising $103,418, but he finished fifth out of six candidates.  There was no reason going into this race to believe that Dang would receive more grassroots financial support than Leventhal or Riemer.  But so far, he has.

3.  Dang is not the only story.  Look at first-time candidate Bill Conway, who collected more private funds than Riemer primarily by having a larger average contribution.  In most elections, challengers struggle to be financially competitive with incumbents.  But the early performances of Conway and Dang relative to Riemer suggest that, at least among publicly-financed candidates, some or all of that gap may be closed.  Our hunch is that a group of at-large candidates will all hit the public matching funds cap of $250,000 and therefore have similar budgets heading into mail season.  The big question will then become how those totals compare to what candidates in the traditional system, like Marilyn Balcombe, Charlie Barkley, Ashwani Jain and Cherri Branson, will raise.

4.  Where is Marc Elrich?  The three-term at-large Council Member and Executive candidate announced that he had qualified for matching funds back in June at roughly the same time that Leventhal and Riemer said the same.  Riemer followed up by filing for matching funds and Leventhal did it twice.  Why hasn’t Elrich filed more than two months after his announcement?  One suspects that the bewildering paperwork requirements of public financing are responsible for the delay, but political types are starting to chatter about it.

That’s all for now.  Candidates, keep those reports coming in so your favorite blog has more material for the readers!

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Evaluating the Candidates for County Executive: George Leventhal

Today, I conclude my series on the current major declared Democratic candidates for county executive with a discussion of George Leventhal’s candidacy. Previous posts took looks at Marc Elrich and Roger Berliner.

Introducing George Leventhal

Like Nancy Floreen, George won election initially on Doug Duncan’s “End Gridlock” slate. Since then, he has won reelection three more times and is now completing sixteen years on the County Council, including two terms as its chair. In his last reelection, George came in fourth among the candidates for at-large seats in the Democratic primary, winning 20% fewer votes than leader Marc Elrich. George is unquestionably passionate about his positions and unafraid of arguing for them forcefully.

His proudest accomplishment is seeing the Purple Line to fruition but, like most significant political acts, this is a victory with many parents. Since it’s a done deal and all the candidates favored the Purple Line, it’s difficult to campaign on the question. One cannot differentiate when voters cannot perceive a difference.

Who is the Leventhal Voter?

In previous profiles, I’ve outlined the core constituency for the candidate. George Leventhal’s central problem is that his core constituency remains hard to identify even after four terms on the Council. He’s been on too many sides of too many different issues to have a natural base. Previously, he opposed a minimum wage increase but now he’s for it. While he was elected on a road-building platform, he now says that he was not elected to build roads. He is pro-immigrant yet lost CASA’s endorsement in the last election.

This leaves George adrift in County politics. Unions don’t trust him because of his past position on the minimum wage and his complete willingness to vilify them when he opposed them on such issues as breaking contracts during the recession and his correct decision, endorsed by the voters, to overturn the overly restrictive bargaining practices with the police union.

Business doesn’t trust him for the same reason. George has been a strong supporter of development, but he now dismisses opponents of the minimum wage increase. George would argue that he evolved and learned on these issues and only a fool never changes his mind. He’s certainly right about that but heaven and earth have changed places a few times too often to attract any of the County’s natural core constituencies.

George has also alienated many in the western half of the County through his repeated denigration of their interests and concerns on any number of issues. George knows he has a problem here. At the at-large Council debate held in Chevy Chase four years ago, George  attempted to prove this inaccurate by reading a thank-you note from a constituent. He got hot under the collar when the audience was visibly unimpressed.

Personality

Supporters would describe George as passionate and pugnacious. George is unquestionably extremely passionate but too many of the people active in politics he now needs as validators for him as a candidate see him as a rude bully. George’s view is that your gentle blogger invented this notion and that his strong convictions excuse any occasional excesses. Unfortunately for George, many others have identified the problem, including the Washington Post, and George’s temper toward colleagues and constituents alike is well known.

George has now learned at an intellectual level what he needs to say and do. He does his best to smile more and to talk about how he wants to bring people together and respect those who disagree. I wish him well in these efforts–we all have room for growth and self-improvement. The problem is that he’s just not there yet and his reputation is well-established after so many years.

Conclusion

Being unable to identify your voter is like a firm being unable to identify its client base. Your business is in trouble. Sixteen years on the Council, including two terms as Council president, also make it difficult to present yourself as the new kid on the block and argue that you’re a force for reform and change. Accordingly, I see George as a second-tier candidate, though the votes he gains may nevertheless sway the race one way or another.

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